Return to search

Climate change is biggest challenge for agri

An Agri Investor poll reveals that 40% of respondents believe climate change will affect the sector the most.

Climate change is the biggest challenge the agriculture industry will face over the next 10 years, according to 18 out of 45 respondents to Agri Investor’s latest poll.

Poor infrastructure was the main concern of 16 respondents while finding qualified people and government regulation got 11 and 10 votes respectively.

James Cairns, associate director, Savills International Farmland, voted for climate change, citing the availability of water as the main issue.

“Water rights [in a number of regions] will have a large influence on asset security, ability to achieve finance and therefore value,” he told Agri Investor.

Blue Sky Water Partners and Kilter Rural Investment are two examples of Australia-based fund managers offering the chance to invest in water rights and take advantage of this trend.

Asian Development Bank’s Martin Lemoine, senior investment specialist in the Private Sector Operations Department, agreed that climate change will be the biggest challenge for the industry.

“Climate change will be the biggest challenge because, unlike the other options, it cannot be fixed as easily and is less likely to improve over time,” he said. “Climate change could cut 18 percent of world food production by 2050. So there is an urgent need for agriculture to adapt to climate change.”

But for Sean Richardson, vegetable manager at Syngenta, poor infrastructure is the biggest challenge to the industry because food is not being distributed effectively. Infrastructure systems are antiquated for the bulk movement of food, such as grains, in emerging markets such as Asia, but he points to Australia as an example of a developed nation with poor systems.

“Australia, which is a major influence on my personal experiences, as one of the top five grain exporting countries, has terrible infrastructure to supply global markets – a massive barrier to capacity expansion – and a challenge we are all faced with,” he said.

Several sources have told Agri Investor over the course of the year that finding qualified people with the right expertise in agriculture whether on the investment or operations side is very challenging. On the financial side, few have the experience, and on the operations side, there is a generational problem as the average age of farmers in countries such as Australia and the US steadily increases as young generations prefer to work in the cities.

Government regulations, such as limits on foreign ownership, as seen as relatively easy challenges to overcome and situations that agri investors can come to terms with if they want exposure to a certain country.

 Source: Agri Investor poll